2022 QCCA 270, 2022 QCCA 270

Réception de Zenda Glenhill Holdings Corporation 2022 QCCA 270 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No: 500-09-029464-211 (500-11-057811-206) DATE: February 22, 2022 CORAM: THE HONOURABLE GENEVIÈVE MARCOTTE, J.A. MARIE-JOSÉE HOGUE, J.A. PETER KALICHMAN, J.A.

IN THE MATTER OF THE RECEIVERSHIP OF: ZENDA GLENHILL HOLDINGS CORPORATION ZENDA BRIDGEWATER HOLDINGS CORPORATION ZENDA DUCKWORTH STREET HOLDINGS CORPORATION ZENDA WATERSIDE COMMONS HOLDINGS CORPORATION ZENDA STONE CREEK HOLDINGS CORPORATION ZENDA OMNI HOLDINGS CORPORATION ZENDA ORLEANS SQUARE HOLDINGS CORPORATION ZENDA BLUESTONE COMMONS HOLDINGS CORPORATION ZENDA MOUNT PEARL SQUARE HOLDINGS CORPORATION GERALD E. LEVY APPELLANT – Respondent v. RICHTER ADVISORY GROUP INC. RESPONDENT – Receiver/Applicant and TIME EQUITIES INC. RESPONDENT – Impleaded party JUDGMENT [ 1 ] Appellant Gerald E.

Levy appeals a judgment rendered on March 19, 2021, by the Superior Court of Montreal (the Honourable Justice Louis J. Gouin), which ordered his imprisonment following a finding of civil contempt of court. [ 2 ] For the reasons of Marcotte, J.A., with which Hogue and Kalichman JJ.A. concur, THE COURT: [ 3 ] ALLOWS the appeal in part, without legal costs; [ 4 ] VARIES the judgment of the Superior Court by striking paragraphs 2 and 4 of the conclusions of the judgment and by replacing paragraphs 3 and 5 with the following paragraph: [3] ORDERS Mr.

Levy to complete and file with the Court the final version of the Levy Report at the latest on March 31, 2022 at 4:30 pm , together with supporting documents and his solemn declaration, with a copy to the lawyers that were present at the March 19, 2021 hearing for their review, after which he will be summoned to appear before the Superior Court at a date and under the conditions to be determined by the Superior Court, to follow up on the Levy Report and allow the judge to determine if it is to the satisfaction of the Court and if not, to order any additional imprisonment term that is required to ensure full compliance, the whole in accordance with

article 62 para. 2 C.C.P . GENEVIÈVE MARCOTTE, J.A. MARIE-JOSÉE HOGUE, J.A.

PETER KALICHMAN, J.A. Mtre Jean El Masri EL MASRI AVOCAT Mtre Daniel Brook BROOK LEGAL For Appellant Mtre Éva M. Richard Mtre Gérald F. Kandestin KUGLER, KANDESTIN For Respondents Richter Advisory Group Inc. Mtre Nicholas Chine Mtre Neil Stein STEIN & STEIN Mtre Gregory Azancot AZANCOT & ASSOCIÉS For Impleaded party Date of hearing: September 24, 2021 REASONS OF MARCOTTE, J.A. [ 5 ] Appellant, Gerald E. Levy (“Levy”), appeals a judgment rendered on March 19, 2021, by the Superior Court of Montreal (Louis J.

Gouin, J.S.C.). [1] This judgment is the latest of seven orders that followed an earlier finding of civil contempt of court rendered on July 20, 2020, further to Levy’s failure to furnish an affidavit explaining the whereabouts of missing funds totalling some $11 million. [2] [ 6 ] The conclusions of the judgment under appeal are as follows: [1] DECLARES that Capitalized terms not defined herein have the meanings ascribed thereto in the January 12 and 21, and February 1, 2021 Judgments; [2] RELEASES temporarily Mr.

Levy from his incarceration at the Établissement where he is presently incarcerated, immediately upon Mr. Levy surrendering to the Établissement his passport, as well as any NEXUS or other travel card held by him, such release to be effective for a limited period, namely from March 19, 2021, until to April 22, 2021, at 5:00 pm, it being understood that all the other terms and conditions provided for in the January 12 and 21, and February 1, 2021, Judgments CONTINUE to apply without any amendments, except that Mr. Levy may ask Mr.

Isar Klaiman to voluntarily help him in the preparation of the Levy Report, but with no obligation on the part of Mr. Klaiman; [3] ORDERS Mr. Levy to complete and file with the Court the final version of the Levy Report at the latest on April 22, 2021, at 1:00 pm , together with supporting documents and his solemn declaration, with a copy to the lawyers that were present at the March 19, 2021, hearing for their review, analysis and verification; [4] ORDERS Mr.

Levy to surrender voluntarily to the Établissement before 5:00 pm on April 22, 2021 , to serve his 7 th additional term of imprisonment , namely from April 22, 2021, to November 4, 2021 , subject to same being confirmed at a virtual hearing to be held on April 23, 2021, at which time it will be decided if the Levy Report is satisfactory to the Court and whether or not Mr. Levy shall then be released from imprisonment; [5] SUMMONS Mr.

Levy before the Court while serving his 7 th additional term of imprisonment, namely on April 23, 2021, at 9:00 am (the coordinates of the virtual hearing to be provided in due time), to follow up on the Levy Report as provided hereinabove; [6] THE WHOLE with costs in favour of the Receiver. [3] THE CONTEXT [ 7 ] In December 2019, Levy’s sons discovered that $11 million were missing from the limited partnerships under the management of Levy and Zenda Realties Ltd., a property management company owned and controlled by Levy and other family members.

These limited partnerships held nine shopping centres located in the United States and in Canada. They were held by a syndicate of investors, with the Respondent corporations (the “Zenda Corporations”) acting as general partners. [ 8 ] After realizing that $11 million had disappeared from the limited partnerships’ reserve funds, the sons questioned their father, who explained that the money had been used to grant unsecured loans to persons or entities which he refused to identify. The sons terminated his employment at Zenda Realties Ltd. and hired lawyers and consultants to resolve the situation.

[ 9 ] In January 2020, the Superior Court appointed Respondent Richter Advisory Group Inc. as receiver-manager of the Zenda Corporations (the “Receiver”), [4] for the purpose of managing the Zenda Corporations’ activities.

The Receiver was given broad powers to investigate and recover the misappropriated funds. [ 10 ] Levy eventually delivered some documents to the Receiver, supposedly evidencing the loans. [5] The Receiver then requested that Levy provide a detailed affidavit to support the validity of these documents and the purported loans. [6] Levy failed to provide the requested affidavit while falsely representing to the limited partners that he was cooperating with the Receiver. [ 11 ] In June 2020, the Superior Court ordered Levy to provide the requested affidavit (the “Affidavit Order” [7] ) and on July 20, 2020, in the Contempt Judgment, it held him in contempt and sentenced him to seven days of imprisonment to be served beginning on August 3, 2020, unless he furnished the requested affidavit by that date.

It also summoned Levy to explain himself at the expiry of his seven-day sentence, failing which he would be sentenced to additional terms of imprisonment. The judge explained as follows: [8] [86] Furthermore, G. Levy’s continued refusal to furnish the Requested Affidavit may result in an extension of his imprisonment until such time as he furnishes the Requested Affidavit to the satisfaction of the Court and, to that end, G.

Levy will be periodically summoned before the Court to explain himself and, if need be, will be sentenced to additional terms of imprisonment. (Emphasis added) [ 12 ] On July 31, 2020, the Superior Court issued bankruptcy orders against Levy and Zenda Realties Ltd. and appointed Litwin Boyadjian Inc. as trustee to their assets. [9] [ 13 ] Levy and Zenda Realties Ltd. appealed both the bankruptcy order and the Contempt Judgment.

On October 19, 2020, this Court granted the Receiver’s applications to dismiss both appeals while affording Levy a five day delay (until October 26, 2020) to comply with the Contempt Judgment. [10] [ 14 ] Following this Court’s judgment, the Superior Court judge, on seven separate occasions, sentenced Levy to additional terms of imprisonment under

article 62 para. 2 of the Code of Civil Procedure ( C.C.P. ) for his repeated failure to comply with the Affidavit Order to the satisfaction of the Court, as follows: • On November 12, 2020, he was sentenced to a first additional term of seven days after the Superior Court judge qualified his explanations as “totally unacceptable”. [11] • On November 19, 2020, the Superior Court judge considered Levy’s explanations to be “still unacceptable” and sentenced him to a second additional term of eleven days while ordering him to complete the affidavit “including a chart detailing each group of borrowers to whom Gerald E.

Levy made loans, so as to follow the trace of these loans from the day of disbursements until today”. [12] • On November 30, 2020, the Superior Court judge found Levy’s explanations to be “still and even further confusing” and sentenced him to a third additional term of seven days, after he came up with a new explanation, claiming that the funds were used to pay interest and repay capital on his own loans rather than to lend money to others.

Again, the judge ordered him to complete the affidavit, including a chart detailing each group of borrowers or his personal use of the funds. [13] • On December 7, 2020, the judge considered Levy’s explanations to be “still very confusing, unclear and incomplete” and sentenced him to a fourth additional term of imprisonment of fourteen days.

He also ordered the completion of a report identified as the “Levy Report”, including the chart of borrowers previously mentioned, following the delivery of several boxes of documents providing information on his use of the funds. [14] • On December 21, 2020, the Superior Court judge sentenced Levy to a fifth additional term of twenty-two days and sought from the parties’ counsel, in writing and before the next hearing, their written proposals for future steps.

Again, the judge ordered Levy to complete the Levy Report and ordered him to fill out a form entitled “Template of Gerald Levy source and Use of Funds”, supported by his solemn declaration. [15] • On January 12, 2021, at the parties’ suggestion, the Superior Court judge ordered Levy’s temporary release, subject to a number of conditions, in order to facilitate his completion of the Levy Report.

He also ordered Levy to surrender himself to prison on January 21, 2021, to serve a sixth additional term of one day and to appear before him before the expiry of his sixth additional term of imprisonment in order to explain himself, at which time he might be sentenced to additional terms of imprisonment. [16] • Following this order, the Superior Court judge extended Levy’s release on two occasions, January 21, 2021 and February 1, 2021, under the same conditions.

Each time, he ordered Levy to surrender himself at the end of his release to serve his additional term of imprisonment of one day, while summoning him to explain himself before the expiry of this term and warning him again that he could be sentenced to additional terms of imprisonment, if needed. [17] The last extension of Levy’s release expired on March 18, 2021. [18] • On March 19, 2021, the Superior Court judge rendered the judgment under appeal.

Despite having characterized March 18, 2021 as a peremptory date for the filing of the Levy Report and having stated that “this whole exercise has to come to an end once and for all”, the judge nonetheless declared himself “prepared to give a last chance to Mr. Levy”. He then released him until April 22, 2021, subject to the conditions of his previous releases, to allow him to complete and file a final version of the Levy Report.

He also ordered that he surrender himself to prison on April 22, 2021 to “serve his 7 th additional term of imprisonment, namely from April 22, 2021, to November 4, 2021, subject to same being confirmed at a virtual hearing to be held on April 23, 2021, at which time it will be decided if the Levy Report is satisfactory to the Court and whether or not Mr. Levy shall then be released from imprisonment”. The judge also

summoned Levy to appear before the Court on April 23, 2021, to follow up on the Levy Report. [ 15 ] Levy appealed this decision on April 19, 2021. [ 16 ] On June 7, 2021, this Court dismissed the Receiver’s application to dismiss the appeal. [19] ISSUES IN APPEAL [ 17 ] The Appellant argues that the Superior Court judge committed several reviewable errors: 1. By imposing a “new” sentence that had not been provided for in the Contempt Judgment; 2. By holding him to an improper burden of proof in the context of this new sentence, thus violating his constitutional rights; 3.

By failing to provide proper reasons to sentence him anew and thus pre-judging him by imposing in advance a seventh additional term of imprisonment. ANALYSIS 1. Did the trial judge impose a “new” sentence that had not been provided for in the Contempt Judgment? [ 18 ] While acknowledging that

article 62 para. 2 C.C.P . [20] empowers the Superior Court judge to summon the contemnor periodically to return to serve out the remainder of the sentence if he fails to comply with the initial order, the Appellant argues that the provision does not allow the judge to add terms of imprisonment to the initial sentence. He asserts that such additional terms were not provided for in the initial Contempt Judgment and were thus imposed without him having had the benefit of a proper hearing. In his view, any other

interpretation would amount to imposing an indeterminate sentence or a sentence “by instalment” (i.e., a sentence allowing the court to keep adding additional terms of imprisonment). He claims that the additional terms are being imposed in “an artificial fashion to keep jurisdiction over [him] and [against] the best interests of justice” in contravention of criminal and penal law principles and of his Charter- protected rights. [ 19 ] Relying extensively on this Court’s

interpretation of

article 62 para. 2 C.C.P . in Lacroix v. Autorité des marchés financiers , [21] the Receiver answers that the provision specifically contemplates the situation where a court, faced with a refractory offender, may order further imprisonment until he complies. It also argues that the Contempt Judgment is final and is subject to res judicata . [ 20 ] Before going any further, I must point out that, contrary to the Appellant’s assertion, indeterminate sentences are not unconstitutional per se nor can they be said to violate principles of criminal and penal law.

In the context of the dangerous offender provisions of the Criminal Code , the Supreme Court ruled that indeterminate sentences are constitutional. [22] [ 21 ] Moreover, in Lacroix , the Court illustrated two potential approaches to imposing terms of imprisonment where a court is faced with a refractory offender pursuant to

article 62 para. 2 C.C.P. In that particular case, the Court was concerned with the manner in which the imprisonment had been ordered and, more particularly, with the reassessment of imprisonment in the event that the contemnor agreed to comply with the order, as the trial judge had left it entirely up to the contemnor to notify the Superior Court through his counsel to request a hearing to allow him to explain himself. [ 22 ] The Court found that such an approach was not compatible with the wording of

article 62 para. 2 C.C.P. , which provides that the “person so imprisoned must be summoned before the court periodically to explain themselves”. It held that the judge could either impose an initial short term of imprisonment and provide that the person be brought back before the court upon the expiry of that term to explain themselves, or it could impose a longer term of imprisonment and order that the person be brought back before the court periodically to explain themselves (at a fixed interval or by fixing the date of appearance). The Court wrote: [23]

[61] (Translation) In the specific case where the person refuses to comply with “the court order or injunction”, pursuant to the last paragraph of

article 62 of the new Code, “in addition to the sanction imposed [i.e., a fine and/or compensatory community work], the court may order imprisonment” […] [111] The last paragraph of

article 62 of the new Code states that the “person so imprisoned must be summoned before the court periodically to explain themselves” [emphasis added]. [112] A number of specific cases are possible. [113] The court could impose an initial short term of imprisonment and provide in its order that the person be brought back before the court upon the expiry of that term so they can explain themselves and, if the person does not comply, the court could impose a new term of imprisonment and so on. [114] The court could also provide for a longer term of imprisonment and order that the person be brought back before the court periodically during that term to have an opportunity to explain themselves.

In this regard, the court could provide for the return to court of the contemnor at fixed and predetermined intervals (such as every 30 days) or it could establish the date on which the contemnor is to be brought back as and when he appears in court. [115] In all cases, the imprisoned person “must be summoned before the court periodically to explain themselves”.

This allows the court to maintain control over the coercive mechanism and ensure that the imprisonment genuinely satisfies its primary objective, which is to compel the person in question to comply with the order or injunction. [116] There is nothing preventing the contemnor, on his own initiative, from asking to go before the court before the scheduled date if he wishes to explain himself.

In this sense, the contemnor always holds the key to his own cell in that he can go before the court at any time to explain himself and eventually have the term of imprisonment lifted if he shows that he has complied with the injunction or order in question or that he intends to do so. [61] Dans le cas spécifique de refus d’obtempérer à « l’ordonnance ou à l’injonction », en application du dernier alinéa de l’article 62 du nouveau Code, le tribunal « peut, en sus de la peine imposée [c’est-à-dire l’amende et/ou les travaux d’utilité sociale], prononcer l’emprisonnement » […] [111] Le dernier alinéa de l’article 62 du nouveau Code prévoit que la « personne ainsi emprisonnée doit être périodiquement appelée à comparaître pour s’expliquer » [soulignement ajouté]. [112] Plusieurs cas de figure peuvent être envisagés. [113] Le tribunal pourrait ordonner une courte période d’emprisonnement initiale et prévoir dans son ordonnance le retour de la personne devant le tribunal à l’expiration de cette période pour qu’elle s’explique et, si elle n’obéit pas, prononcer une nouvelle ordonnance d’emprisonnement et ainsi de suite. [114 ] Le tribunal pourrait également prévoir une plus longue durée d’emprisonnement et ordonner le retour de la personne périodiquement à l’intérieur de cette période pour qu’elle puisse s’expliquer.

À cet égard, il pourrait être loisible au tribunal de prévoir le retour du contrevenant à intervalles fixes et prédéterminés (par exemple, tous les 30 jours) ou encore d’établir la date de ce retour au fur et à mesure que le contrevenant est ramené devant lui. [115] En tout état de cause, la personne emprisonnée « doit être périodiquement appelée à comparaître pour s’expliquer ».

Il s’agit pour le tribunal de conserver le contrôle sur la mécanique coercitive et de s’assurer que la mesure d’emprisonnement satisfasse véritablement à son objectif premier, soit de contraindre la personne visée à se conformer à l’ordonnance ou à l’injonction. [116] Rien n’empêche cependant le contrevenant de demander de revenir devant le tribunal de sa propre initiative, avant la date de retour prévue, s’il souhaite s’expliquer.

En ce sens, il détient toujours la clef de sa propre cellule en ce qu’il peut s’adresser au tribunal à tout moment pour s’expliquer et voir éventuellement lever une mesure d’emprisonnement s’il démontre avoir obéi ou qu’il entend obéir à l’injonction ou ordonnance en cause. [ 23 ] In the case at hand, in the Contempt Judgment, which has become final, the Superior Court judge chose to follow the first of these two scenarios.

Instead of providing for a long term of imprisonment and ordering that Levy be brought back periodically before him during that term to explain himself, he ordered a short term of imprisonment of seven days, while granting Levy the possibility of complying with the Affidavit Order before beginning to serve his prison sentence on August 3, 2020.

The Superior Court judge, however, also warned him that this imprisonment could be extended should he continue to refuse to furnish the requested affidavit. [ 24 ] The Appellant’s argument is centered on the idea that, having chosen to fix an initial short term of imprisonment, the judge is prevented from adding terms of imprisonment, without affording the contemnor the benefit of a new hearing. This, he argues, suggests a different outcome is possible under

article 62 para. 2 C.C.P. depending on the type of imprisonment order selected (long or short term). [ 25 ] In my opinion, the approach proposed by the Appellant defeats the primary coercive purpose of the imprisonment order, which is to encourage compliance with the Affidavit Order rather than to punish. It also undermines the benefit of imposing incremental terms of

imprisonment, as it suggests that if a longer imprisonment is not ordered from the outset, no further imprisonment may be imposed in the event of non-compliance. [ 26 ] Such a proposition also runs contrary to the wording of

article 62 para. 2 C.C.P. as well as to the legislative debates surrounding its adoption, which emphasized the courts’ power to sanction the contemnor’s refusal to comply by imposing incremental terms of imprisonment. [24] [ 27 ] It also conflicts with the doctrinal

interpretation of the provision, which recognizes that the courts can impose the initial term of imprisonment again and again, up to a maximum of one year: [25]

L'article 62 al. 2 prévoit aussi que la peine d'emprisonnement initiale peut être prononcée de nouveau jusqu'à ce que la personne obéisse à l'ordonnance ou à l'injonction , mais en aucun cas, l'emprisonnement total ne peut excéder un an.

Auparavant, le texte des articles 51 et 761 a.C.p.c. n'était pas aussi clair et pouvait être interprété comme permettant d'excéder la période d'un an, jusqu'à ce que la personne condamnée se soit conformée à l'ordonnance ou à l'injonction. (Emphasis added) [ 28 ] As argued by the Receiver, the Contempt Judgment is final and it provides for a sentence of imprisonment of seven days to which extended terms of imprisonment may be added, if needed, without requiring a new contempt order or a new hearing leading to such an order. [ 29 ] The idea behind varying a sentence and “order[ing] imprisonment again”, pursuant to

article 62 para. 2 C.C.P. , is not to punish the contemnor again but rather to adapt the term of the sentence to the particular circumstances in place so that he is afforded the necessary and proportional time required to ensure compliance. [26] [ 30 ] By analogy with the Supreme Court’s reasoning in Whaling , [27] a variation in the sentence duration would amount to a new punishment only where the settled expectation of liberty had been defeated. [ 31 ] In the case at hand, however, Levy was made aware at all times that imprisonment could be longer if he continued to refuse to comply.

He was in fact warned from day one, in the Contempt Judgment. He could hardly have had a settled expectation of liberty. [ 32 ] Moreover, in Voghell c.

Commission de protection du territoire agricole du Québec , while this Court acknowledged the existence of a debate in common law provinces as to the possibility of a second sentencing for contempt following a refusal to obey a court order multiple times [28] and questioned whether this could amount to double jeopardy [29] , it pointed out that Canadian courts have consistently admitted the potential for multiple contempt charges stemming from repeated refusals or failure to comply. The Court referred in this respect to the reasoning of the Ontario Court of Appeal in Doobay v.

Diamond [30] and in Chiang (Re) , [31] where that court rejected the Alberta Court of Appeal’s approach to the contrary in Braun (Re) , [32] after stating that the approach was at odds with the coercive purpose of civil contempt: [44] To permit only one penal sanction for the ongoing breach of an order deprives the court of the ability to impose measured, but incremental, sanctions to obtain compliance with that order.

In other words, if the court can impose only one period of incarceration for a civil contempt, then it cannot address, in any meaningful way, a contemnor’s continuing defiance. [ 33 ] In so deciding, the Ontario Court of Appeal endorsed the idea of multiple periods of incarceration for civil contempt provided for under Ontario’s Rules of Civil Procedure when faced with an ongoing breach of an order, stating that “the coercive tool of civil contempt must have teeth.” [33] [ 34 ] The Appellant has failed to convince me that by sentencing him to an additional seventh term of imprisonment (without exceeding the one year period) in the face of his repeated refusals to comply, the Superior Court judge added to the Contempt Judgment and that he could not do so without affording the contemnor a new hearing. 2.

Did the Trial Judge commit an error in law by imposing on the Appellant an improper burden of proof, namely, the “satisfaction of the Court”, rather than applying the burden of proof in criminal and penal matters, namely, beyond a reasonable doubt? [ 35 ] The Appellant contends that the demonstration of a contemnor’s non-compliance with a court order is subject to the same burden of proof as a finding of contempt of court, namely, proof beyond a reasonable doubt, with the required actus reus and mens rea.

It must be pointed out that he does not contest the burden of proof that was applied at the time of rendering the initial Contempt Judgment.

Rather, he argues that the Superior Court judge applied the wrong burden of proof at the time of examining compliance with the order by using a subjective criterion (“to the satisfaction of the Court”), thus placing the onus of proving compliance on him on a balance of probabilities. [ 36 ] Moreover, the Appellant claims that he tried, to the best of his abilities, to comply with the Superior Court order but was hindered by limited access to documents and serious time constraints.

Therefore, he denies having knowingly and willfully refused to comply with the order and did not have the required mens rea to refuse to comply. [ 37 ] Finally, he contends that the court order was not clear and unambiguous, claiming that “[t]here is no indication as to what should be mentioned in [the Levy Report] or what would make it complete to the satisfaction of the Court”. [ 38 ] In his argument, the Appellant confuses (

i) the burden of proof for deciding whether or not a person is in contempt of court, which is that of proof beyond a reasonable doubt, with (ii) the criterion by which a court decides whether or not its orders have been respected, which is “to the satisfaction of the Court”.

[ 39 ]

Article 58 C.C.P. codifies the infraction of civil contempt, [34] while

article 61 C.C.P . provides that “the proof submitted to establish contempt of court must be beyond a reasonable doubt”. [35] [ 40 ] In Droit de la famille – 21819 , this Court clearly distinguished the finding of guilt for civil contempt under

article 58 C.C.P. from the determination of its sanctions under

article 62 C.C.P. [36] [ 41 ] Such a distinction is consistent with the Supreme Court’s approach which clearly separates the “liability phase” from the “penalty phase” in common law proceedings in civil contempt. [37] This approach has also been followed by the Quebec Superior Court, as this Court acknowledged in Bradley (Re) . [38] Indeed, because the power to punish civil contempt has its origins in the common law, common law rules may apply here unless they are expressly set aside in Quebec law. [39] [ 42 ] The Ontario Court of Appeal recognized that between the phases of liability and penalty, after a finding of contempt is made, the contemnor may have the opportunity to purge the contempt and to prepare for the sentencing portion of the process, and that any action he undertakes to purge the contempt may serve as a mitigating factor for his sentencing. [40] In Chiang (Re) , it endorsed the trial judge’s reasoning that compliance with the court’s orders should be established by the contemnor on a balance of probabilities at the penalty phase, similar to the demonstration of a mitigating factor in criminal sentencing. [41] [ 43 ] Similarly in Québec, in Lacroix , this Court recognized the various constitutional protections already afforded to a person tried for civil contempt, which is quasi-criminal: [42] [34] Civil contempt of court, which is quasi- criminal, is largely influenced by the rules of criminal law and penal law.

The essential elements of the offence of contempt of court must be proved beyond a reasonable doubt. The guarantees against compellability set out in s. 11(

c) of the Canadian Charter of Rights and Freedoms and in s. 33.1 of the Charter of Human Rights and Freedoms apply and the contemnor is not competent to be called as a witness for the prosecution. [34] De nature quasi pénale, l’outrage au tribunal en matière civile est largement influencé par les règles du droit criminel et du droit pénal. Les éléments essentiels de l’infraction d’outrage au tribunal doivent être prouvés hors de tout doute raisonnable.

Les garanties de non - contraignabilité prévues à l’ alinéa 11c) de la Charte canadienne des droits et libertés et à l’article 33.1 de la Charte des droits et libertés de la personne s’appliquent et le contrevenant n’est pas habile à témoigner pour la poursuite. [ 44 ] However, the Court adopted the burden of proof of “compliance to the satisfaction of the court” at the penalty phase: [43] [107] As

article 62 of the new Code indicates, a person who has been imprisoned for contempt for refusing to comply with an order or injunction must be called periodically before the court to explain themselves. If the person complies to the satisfaction of the court, they must be released. [107] Comme l’indique l’article 62 du nouveau Code, la personne emprisonnée à la suite d’un outrage pour refus d’obtempérer à une ordonnance ou injonction doit être appelée périodiquement à comparaître pour s’expliquer.

Si elle obtempère à la satisfaction du tribunal, elle doit être libérée. (Emphasis added) [ 45 ] This approach was endorsed again by the Court in Droit de la famille – 21819 : [44] [48] En outre, une personne peut être condamnée pour outrage au tribunal si elle « refuse […] de se soumettre pleinement et correctement aux ordonnances » du tribunal.

Le fait de donner suite à une ordonnance d’une manière insatisfaisante ou incomplète peut ainsi justifier l’imposition de cette mesure. (Emphasis added; references omitted) [ 46 ] This Court has therefore clearly distinguished a finding of guilt for contempt from the determination of its sanctions. [ 47 ] Because contempt has been proven by the time the contemnor is called to explain himself before the Superior Court under

article 62 para. 2 C.C.P . , it is only logical to require that he demonstrate a change of situation. [ 48 ] The contemnor then has two options: (

i) to demonstrate that he purged his contempt; or (ii) to demonstrate his inability to purge his contempt under any circumstances. [ 49 ] These demonstrations should be done “to the satisfaction of the Court”, on the balance of probabilities, as established in both Lacroix and Droit de la famille – 21819, failing which an additional term of imprisonment may be imposed.

Adopting a similar approach to that used by the Ontario Court of Appeal in Chiang (Re), the contemnor could, by proving compliance, seek a reduction of the duration of imprisonment on the basis that it amounts to a “mitigating factor”. [ 50 ] Both such demonstrations depend on the facts of the case and are subject to a review in appeal under the palpable and overriding error standard. [45]

[ 51 ] Here, the Appellant failed to demonstrate in his affidavit or in his memorandum, his inability to purge his contempt or that the trial judge manifestly erred in not releasing him. He has also failed to convince me that the order lacked clarity or precision. [ 52 ] Firstly, the issue of clarity of the order is moot. The Contempt Judgment is now final and is subject to res judicata . It cannot be collaterally challenged at the penalty phase. Secondly, the Appellant has failed to show that the order lacks clarity. [ 53 ] The principles relating to clarity and precision were laid out in Morasse v.

Nadeau-Dubois , [46] where the Supreme Court stated that the accused must be made aware of the precise nature of the charges laid against him and that any doubt or ambiguity must be interpreted to his benefit. However, in Voghell , [47] this Court warned against applying this requirement with excessive formalism, the objective being that the accused understand the charges brought against him. Previously, in Zhang c.

Chau , the Court had established that courts should not, “unduly and in a strictly formalistic way, concern themselves only with the letter of the order, nor should they rely exclusively on a verbatim and literal

interpretation”. [48] It also wrote: [49] [31] Instead, Courts should, on the one hand, examine the context in which the order was issued, and evaluate it according to the specific and particular circumstances of the case and, on the other hand, ask themselves whether or not the defendant could have reasonably been aware that his acts or omissions fall under the order. [32] In other words, a defendant cannot hide behind a restrictive and literal

interpretation to circumvent the order and make a mockery of it and of the administration of justice. […] [ 54 ] In the case at hand, the Affidavit Order provided a list of questions for Levy to answer. The trial judge assisted Levy by providing him with a form to be filled out to facilitate the completion of the Levy Report. Considering the proceedings as a whole and, specifically, how little of the form Levy actually filled out, it is obvious that he failed to comply with the essence of the court’s order. The Appellant’s second argument thus has no merit. 3.

Did the Trial Judge fail to give sufficient reasons for his sentence or render a pre-judged sentence against him? [ 55 ] Finally, the Appellant claims that the trial judge erred when he decided on his seventh additional term of imprisonment before the next hearing at which he could have explained himself and that he failed to provide reasons for imposing the maximum sentence of one year as well as to consider his poor medical condition. [ 56 ] The Receiver answers that the guiding sentencing principles for imprisonment following contempt of court are necessity and proportionality and that the offender’s recidivism may be considered, while his “direct recidivism” should lead to a harsher sentence.

Here, given the circumstances (i.e. Levy’s multiple failures to comply and ever-changing version of events), there was ample justification for the sentence.

The Receiver adds that for “the coercive function of imprisonment to be effective, it must be adaptable to different facts and individuals instead of static and inflexible”. [ 57 ] The Receiver also argues that sentencing judges are owed significant deference on appeal and that the Appellant’s claim that the trial judge “pre-judged” the sentence is “patently false” because it was subject to being confirmed at a hearing to be held on April 23, 2021, which means it was, and still is, a live issue to be decided. [ 58 ] In Autorité des marchés financiers c.

Roy , [50] while this Court recognized that the Superior Court, by virtue of its inherent powers, could suspend the passing of a sentence in contempt proceedings and issue a probation order, it held that the Superior Court judge could not determine in advance what the sentence would be in the event of a further breach of the order: [51] [29] À la lumière de ces principes et du texte de l'article [46 a. C.p.c. ], et ce, même si le Code de procédure civile ne le prévoit pas spécifiquement, il faut conclure que la Cour supérieure peut (que ce soit en vertu de l'article [46 a.

C.p.c. ], de ses pouvoirs inhérents, ou d'une combinaison des deux) surseoir au prononcé de la peine. Elle peut aussi, ce faisant, assortir cette ordonnance de conditions qu'elle estime raisonnables pour la période qu'elle énonce. […] [32] En conclusion, le tribunal n'a pas imposé un emprisonnement avec sursis, il a plutôt décidé de surseoir à l'exécution de la peine. Il n'avait pas ce pouvoir, mais il pouvait, et cela était son intention manifeste, surseoir au prononcé de la peine.

Le tribunal ne pouvait pas non plus déterminer à l'avance la peine qui serait imposée en cas de contravention à l'ordonnance . (Emphasis added) [ 59 ] In coming to this conclusion, the Court referred to François Dadour’s book entitled “De la détermination de la peine: principes et application” [52] and to this Court’s approach in R. c. Sangster : [53] I do, however, wish to point out that the true intent of s. 663(1)(

a) of the Code is to suspend “the passing of sentence”, and not the sentence itself. With respect, I therefore consider it unwise to indicate to an accused the precise sentence which might be imposed on him should he fail to observe the conditions set by the court. To do so may well put the judge in a predicament: keep his word and sentence an accused to a term of imprisonment which might be considerably longer than the circumstances would warrant or, in the alternative, give a proper sentence, but lose credibility.

Neither situation is good — the first an injustice to the accused, the second an unnecessary embarrassment to the court. This should not be taken to mean that an accused cannot be told that failure to abide by the conditions might entail serious consequences, indeed even imprisonment for a lengthy period . But I do think that no court should bind itself in so absolute a fashion that all room for discretion will have vanished

(Emphasis added) [ 60 ] Moreover, in Lacroix , while this Court identified the main criteria “for issuing a coercive order of imprisonment for civil contempt [as] necessity and proportionality”, [54] it did add that “the term of the coercive imprisonment should not exceed what is reasonable to achieve the fundamental objective sought, which is compliance with the order or injunction”. [55] [ 61 ] In my opinion, in light of these principles, the trial judge was not entitled to pre-determine the duration of Levy’s seventh additional term of imprisonment.

Circumstances might change between the time of the decision and the hearing at which Levy could explain himself, such that there was a risk of causing an injustice to Levy, should he decide to comply in part with the order and disclose the details of his use of the misappropriated funds. [ 62 ] Even if Levy’s actions or explanations might not amount to compliance with the order “to the satisfaction of the Court”, they could warrant a shorter additional term of imprisonment, if only to bring him to full compliance.

Also, in the event that Levy did end up complying, he should not be required to serve any additional time in jail while awaiting his hearing. [ 63 ] Applying the principles of Autorité des marchés financiers c.

Roy [56] to the case at hand, the correct approach would have been to suspend the imposition of an additional term of imprisonment, to release Levy (subject to a number of conditions to be determined by the judge) in order to facilitate the purging of his contempt and to summon him before the Superior Court at a later date to explain himself, while warning him that he could face a potentially lengthy additional term of imprisonment if he failed to comply. The Superior Court judge, however, could not bind himself prematurely to any specific duration of additional imprisonment.

Added to this problem is the fact that the judgment under appeal contains an order summoning Levy to surrender himself to prison on April 22, 2021, only to be heard the day after, on April 23, which is not, in my view, an acceptable outcome, because it requires imprisonment prior to the ability to demonstrate compliance. [ 64 ] Hence, in my opinion, while it is undeniable that the Superior Court judge had the power to suspend the passing of the sentence and to release Levy to facilitate the purging of his contempt, he committed a reviewable error by pre-judging Levy’s last additional term of imprisonment and by ordering that he surrender himself prior to having the opportunity to show his compliance with the order. [ 65 ] Despite the well-established principle that sentences will usually be owed significant deference on appeal, [57] such an error justifies this Court’s intervention with respect to the conclusions that pertain to Levy’s seventh additional term of imprisonment and the order to surrender.

I thus propose to quash these conclusions, while summoning Levy to appear at a later date before the Superior Court in order to allow him to demonstrate his compliance and to allow the Superior Court to determine whether or not an additional term of imprisonment is warranted and, if so, for what duration. [ 66 ] Hence, for all of these reasons, I would propose that this Court allow the appeal in part for the purpose of varying the conclusions of the Superior Court judgment rendered on March 19, 2021, by striking paragraph 2, which has become moot, as well as paragraph 4 pertaining to the seventh additional term of imprisonment, and by replacing paragraphs 3 and 5 so as to fix a new date for the filing of the Levy Report and provide that Mr.

Levy will be summoned to appear before the Superior Court after such date, for the purpose of following up on the Levy Report and allowing the judge to determine whether he has complied with the order to the satisfaction of the Court and whether any additional imprisonment is required to ensure full compliance. [ 67 ] In light of the mitigated outcome of the appeal, I propose that legal costs not be awarded. GENEVIÈVE MARCOTTE, J.A. If the person refuses to comply with the court order or injunction, in addition to the sanction imposed, the court may order imprisonment for the term it specifies.

The person so imprisoned must be summoned before the court periodically to explain themselves, and imprisonment may be ordered again until the person complies. Imprisonment can in no case exceed one year. Si la personne refuse d’obtempérer à l’ordonnance ou à l’injonction, le tribunal peut, en sus de la peine imposée, prononcer l’emprisonnement pour la période qu’il fixe. La personne ainsi emprisonnée doit être périodiquement appelée à comparaître pour s’expliquer et l’emprisonnement peut être prononcé de nouveau jusqu’à ce qu’elle obéisse. En aucun cas, l’emprisonnement ne peut excéder un an.

58. A person who disobeys a court order or injunction or acts in such a way as to interfere with the orderly administration of justice or undermine the authority or dignity of the court is guilty of contempt of court. A person not named in an injunction or protection order who disobeys that injunction or protection order is guilty of contempt of court only if the person does so knowingly. 58.

Se rend coupable d’outrage au tribunal la personne qui contrevient à une ordonnance ou à une injonction du tribunal ou qui agit de manière à entraver le cours de l’administration de la justice ou à porter atteinte à l’autorité ou à la dignité du tribunal. En matière d’injonction et d’ordonnance de protection, la personne qui n’y est pas désignée ne se rend coupable d’outrage au tribunal que si elle y contrevient sciemment. 61. The judge who is to rule on a contempt of court allegation must not be the judge before whom it was allegedly committed, unless the matter must be ruled on without delay.

The person charged with contempt of court cannot be compelled to testify. The proof submitted to establish contempt of court must be beyond a reasonable doubt. If the judgment finds that contempt of court was committed, it must set out the facts on which the finding of contempt is based. The resulting sanction may be imposed in a subsequent judgment. The time limit for appealing a finding of contempt runs as of the date of the notice of judgment imposing the sanction or the date of the judgment imposing the sanction if the judgment was rendered at the hearing. 61.

Le juge qui doit décider de l’outrage ne doit pas être celui devant qui cet outrage aurait été commis, à moins que l’affaire ne doive être décidée sans délai. La personne à qui il est reproché de l’avoir commis ne peut être contrainte à témoigner. La preuve offerte relativement à l’outrage ne doit pas laisser place à un doute raisonnable. Lorsque le jugement déclare qu’un outrage a été commis, il doit énoncer les faits sur lesquels il se fonde. La sanction qui en découle peut être prononcée dans un jugement subséquent.

Le délai d’appel d’une déclaration d’outrage court à compter de la date de l’avis du jugement qui prononce la sanction ou de la date du jugement qui prononce la sanction si celui-ci a été rendu à l’audience.